Commentary | 14 December 2018

Europe's crisis of unrealistic expectations

Originally published in Australian Financial Review 

Originally published in Australian Financial Review 

There may be an odd link between relative affluence and political instability. The longer societies enjoy order and prosperity, the more they may take it for granted.

Western Europe on balance has enjoyed a remarkable run of progress and peace since the near ruin of civilisation on the continent in 1945. But research indicates when problems are rare it causes us to expand our definition of them.

Voters in Western democracies are upset for a multitude of reasons: cost of living, stagnant wages, disgraced elites, immigration and sovereignty. But also, consider the possibility that electorates are flirting with high-risk change out of complacency born of decades of relative stability.

What unites France's gilets jaunes and the UK's fiercest Brexiteers is the curse of unrealistic expectations when advocating for drastic change. These groups overrate the benefits of pursuing their aims while underrating the inadvertent costs of their actions. Neither movement actively desires an intractable political crisis. But that is exactly what they are getting.

In London, the mother of parliaments has been reduced to blaring, screeching chaos this week, leaving a cornered government with little choice but to pull a vote on the single most consequential issue faced by the country in 40 years, how the United Kingdom will leave the European Union.

Revolutionary history

In Paris, a city steeped in revolutionary history, the gilets jaunes smashed up the Arc de Triomphe, prompting panic-driven U-turns in government policy. In the chaos, that essential French contradiction – the demand for lower taxes and better public services – remains fundamentally unresolved.

Between unrealistic expectations and hard choices lies an increasingly embattled political buffer. Prime Minister Theresa May has had two years to grow accustomed to being the punching bag in British politics as she doggedly tries to hold her party together. Her latest humiliation was a party vote of no confidence on Tuesday night. Though May survived the vote, it again exposed the wilful inability of her colleagues to see that her deal is the best London is going to get – simply because it is the best Brussels is willing to give.

For President Emmanuel Macron, the humiliation and debilitating experience of governing is newer but no less stark. France may have elected a renaissance man but it would take a magician to meet the demands of the gilets jaunes. Only the hard slog of structural reforms to the French labour market would succeed in reinvigorating the economy and make it easier to create jobs.

Macron and May have stubbornly held on to the conviction that they can roll back the political tide. Macron aims to show the French economy can be made to work for ordinary people. May needs to demonstrate she can deliver on an orderly Brexit. Both leaders have notched up real but under-appreciated achievements in this regard but have been greatly – perhaps terminally – wounded by events.

The irony is their plans represent the only viable means of addressing the underlying grievances of their political discontents. Though they are working on different projects, Macron and May are each offering their countries a last chance at the least bad of the bad outcomes on offer. Failure to achieve what they have set out to do would have severe unintended consequences.

Riven with divisions

If there is no majority in the House of Commons for either Theresa May's deal, a Brexit that does not impoverish the country, or no deal at all – with all the disruption that entails – it raises the likelihood of Parliament calling another referendum. Yet a second people's vote is unlikely to produce a more decisive result than the first.

Few things can be more terrifying than the UK staying in the EU with a razor-thin margin of domestic support. It would be a member state riven with divisions and rage at the power imbalance between Brussels and London, unwilling to concede to any problem-solving advance in integration, seeking to blackmail its partners into special opt-outs, always teetering on the brink of a new Brexit.

Perhaps the only thing more terrifying than that would be an unreformable France, paralysed by protests and street violence that rumble on for months. That would deprive Paris of the ability to work with Berlin for deeper integration that could strengthen the EU and, in turn, stem the populist tide in Europe writ large.

Europe is made of two kinds of countries. Small countries and countries that are in denial that they are small. Britain and France fall in that second category. Unreconstructed exceptionalism is making leading either country seem an increasingly impossible job.

As the stakes of permanent crisis in London and Paris become clearer, one can only hope that the precipice of failure will serve as a political wake-up call for the centre ground.

If the careers of Theresa May and Emmanuel Macron end in abject failure – a prospect their detractors are intent on making reality – Europe's stability may no longer be something anyone takes for granted.